Top European Agencies 1997: Continental shift - As the pressure mounts to think globally and act locally, PR agencies look for structures to take them into the next millennium. Kate Nicholas reports

The public relations industry has experienced something of a watershed in the past couple of years. In 1995 international groups such as Shandwick and Countrywide Porter Novelli became preoccupied with the issue of branding.

The public relations industry has experienced something of a

watershed in the past couple of years. In 1995 international groups such

as Shandwick and Countrywide Porter Novelli became preoccupied with the

issue of branding.



While last year, it was the nuts and bolts of agency management that

came under the spotlight, with both owned groups and networks

rearranging the building blocks of their operations.



’We are entering a period of unprecedented change. You have to think

carefully about how you structure a pan-European capability to take you

into the next millennium,’ says Jonathan Simnett, board director of A

Plus - the lead agency in the Euro Plus network.



The ability to think globally but act locally has undoubtedly emerged as

a primary concern for international clients. But the PR industry still

appears uncertain about how to create the most effective structure to

meet client requirements.



At the same time, consultancies appear to be slowly waking up to the

fact that the real issue isn’t about creating a structure to suit

themselves, but a fluid one that suits clients needs - one that is

flexible enough to mirror a client’s own organisation.



’There is an atmosphere of reason that has crept into the international

market. An entrepreneurial approach that is is less dogmatic than it was

before,’ says Graham Lancaster chairman of Euro RSCG International

Communications (ERIC).



’There is no hard and fast rule, you have to look at the client, how it

is organised and what it is trying to achieve,’ agrees Nigel Kennedy

managing director of the Grayling Group.



Such fluidity of approach inevitably requires agencies to continually

reassess their operations. Mark Adams director mainland Europe of Text

100 believes that: ’If anyone works in Europe these days they should get

used to having an annual restructure. Client companies - technological

or otherwise - are uncertain how to manage European growth, it is still

new and there are still many organisational challenges.’



Burson-Marsteller was one of the first companies to break the

geographical mould and establish a client-oriented/practice-led

structure. European fee income subsequently surged by 15 per cent in

1996, supporting the agency’s claim that its shift of emphasis has led

to greater productivity.



Ogilvy Adams and Rinehart, also followed suit with its own brand of

’best-practice’ management, which has been described by executive

vice-president Marilou von Festel as ’a combination of practice and

geography’.



’We agree which company works best with the client. A lot of companies

are enthusiastic about this approach because it stands to reason they

get the best agency for each country and the flexibility that offers,’

says Lyle Closs, acting head of OA&R in the UK, who also heads up the

agency’s IT practice group.



Euro RSCG is currently developing healthcare and financial practice

groups.



’Most companies nowadays are taking a B-M approach to a degree, but

local market excellence and branding still remain central,’ says

Lancaster.



’Eighty-five per cent of Euro RSCG business remains a local offering

but, equally, you have to have the ability to develop cross brands

either for vertical markets and clients, or where they are working on a

cross-border basis. Some areas such as telecoms are better served than

others by a vertical market approach.’



Ketchum Worldwide has created four new global practices, but chairman

and CEO David Drobis talks about constructing a matrix which will take

account of not only practice but also regional differences



And there are very significant regional differences. While a

practice-led structure makes sense in a developed market such as Germany

or France, what happens when you have an office of, say, 12 people in a

smaller market such as Austria? Can an agency afford to carve its staff

down into specialist areas, risking the chance that its public affairs

department might walk out the door if head-hunted? While accepting the

increasing segmentation of developed markets as a sign of maturity,

Volker Stoltz, Shandwick’s managing director, continental Europe says he

still prefers an organisation that is office-organised - ’this is where

you go to recruit local people and have to make profit and losses’.



Adams of Text 100 is another advocate of a localised focus. ’The phrases

pan-European and global are almost passe,’ according to Adams. ’We don’t

talk pan-European, but multi-country clients. Most clients realise that

the only way to do PR is with a strong local unit. The people on the

ground (in client companies) deal with the day-to-day running and

marketing.



You can’t say ’don’t deal with PR’.’



Concern about the differing levels of development in different markets

is also having an effect upon the structure of pan-European networks,

with many increasingly looking for a number of specialist agencies as

members in each country. Fishburn Hedges, Farner PR, Information et

Enterprise, Interel and Khotes and Klewes have gone so far as to form a

specialist financial network Global Financial Communications Network

(GFC/Net).



Worldcom also secured its hold on the booming technology market and

boosted its world fee income by 22 per cent to pounds 88 million last

year largely on the back of its merger with hi-tech agency network

Globalink.



But how do you sew the seeds of a pan-European capability? Do you buy up

a local agency or merge your operation with another which already has

access to these markets, ensuring instantaneous access to regional staff

and know-how, but also risking the challenge of merging disparate agency

cultures? Or do you take the slow burn approach and build your presence

gradually in each country, ensuring a continuity of the agency

culture?



Or do you do both?



These have been the dilemmas facing companies such as Fleishman-Hilllard

- a consultancy with a tradition of strong organic growth in Europe, but

which, following its acquisition by Omnicom earlier this year, is

currently ironing out the details of its merger with sister company

Countrywide Porter Novelli. The likelihood is that the deal will deliver

the best of both worlds providing a presence in hitherto weaker markets,

while allowing for the autonomy of two strong brands.



Whatever approach an agency chooses, the challenge remains to provide

seamless client service across a enormous range of client markets.

Operating a seamless cross-border campaign across Europe isn’t easy -

but at the end of the day a client doesn’t want to know about the

hurdles that an agency has to overcome.



’Clients have the right to expect equivalent skills and equivalent

levels of implementation across consultancies,’ says Simnett, advocating

what he describes as the ’McDonald’s approach’. ’When you go to a

McDonald’s, no matter where in the world it is, you know exactly what

you are going to get. There are no surprises for the client and they

should know what they are going to get in terms of implementation and

skills.’



TABLE RANKINGS: THE FACTS ON THE FIGURES



The 1997 PR Week European Consultancies League Table ranks owned groups,

networks and consultancies in leading European markets by calendar year

fee income. For the first time this year, PR Week has enlisted the

co-operation of trade associations in some of the main continental

markets in order to produce the most comprehensive cross-border league

tables in Europe. Syntec RP in France, Gesellschaft Public Relations

Agenturen (GPRA) in Germany, Associazioine Agenzie di Relazioni

Pubbliche a Servizio Completo (ASSOREL) in Italy, Association of

Consulting Companies in Public Relations and Communications (ADECEC) in

Spain and Bund der Public Relations Agenturen der Schweiz (BPRA) in

Switzerland advised on exact definitions of PR Week’s criteria to avoid

misunderstandings in the different markets. .



According to PR Week’s criteria, ’European income’ includes fees for PR

work carried out in the EU and Switzerland. It does not include income

relating to non-PR activities such as advertising, direct mail and

design etc. To avoid possible misinterpretation of the term ’mark-up’ in

different European markets, consultancies were asked for the first time

this year to submit fee income only. To avoid an imbalance in the tables

caused by use of different exchange rates, consultancies were also asked

to provide calculate sterling fee income figures for 1996 and 1995

according to a set average exchange rate (see below).



Once PR Week’s tables had been compiled, the trade associations in the

relevant countries checked members figures against their own records to

help ensure accuracy of the PR Week ranking.



Informal advice was also given in the early stages by the Belgian

association ABCRP/BGPRA and the Netherlands association the VPRA which

closed earlier this month.



For the 1997 PR Week European Consultancy League Tables local currency

was converted as per the average Financial Times exchange rates below

for 1996. For comparison purposes both 1996 and 1995 figures were

converted at the same rate.



Belgium             48.4

France               8.0

Germany              2.4

Italy             2408.7

The Netherlands      2.7

Spain              197.8

Switzerland          1.9



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